Snapchat has been losing money for a while now, and it seems that the company will soon be taking some tough measures to make up for it. According to a new report from The Verge, Snap Inc. (the company that owns Snapchat) plans to lay off about 20% of its employees in the coming days.
The company has reportedly been planning the layoffs “for the past several weeks.” Sources familiar with the matter said that some departments will be affected more than others.
One of the departments to face the most layoffs is the mini apps and games for Snapchat. Those working in the hardware division, which is responsible for the Spectacles AR glasses, will also be severely affected. Snap Inc. currently has over 6,400 employees. If we consider a 20% layoff, that means the company will lose over 1,000 employees.
Unsurprisingly, Snap Inc. declined to comment on the layoffs. But as noted by the report, the layoff doesn’t come as a surprise. Snapchat hired a huge number of employees during the pandemic. However, since the beginning of 2022, Snap Inc. has lost about 80% of its value in stock prices. And last year, the company reported lower-than-expected earnings.
Apple has been making Snap lose money
One of the reasons why Snap Inc. has been losing money is Apple. The company’s CEO Evan Spiegel revealed last year that the latest changes to iOS privacy policies have made it harder for partners to advertise on Snapchat’s iOS app. This, of course, reduced the company’s advertising profits.
“While we anticipated some degree of business disruption, the new Apple provided measurement solution did not scale as we had expected,” said Spiegel in October 2021. Since then, Snap Inc. has been working on new ways to keep tracking users despite Apple’s App Tracking Transparency feature.
Snap Inc. had also been investing heavily in its own hardware, which includes the Spectacles and the Pixy camera drone. However, Spectacles never became a hit, and Pixy was recently canceled after being on sale for only a few months. With Apple about to enter the AR/VR market with its rumored headset, things could get even tougher for Snapchat’s hardware.
Even so, Snapchat’s user base has been growing strongly. The platform now has more than 347 million daily users, which is more than Twitter has.
FTC: We use income earning auto affiliate links. More.
Comments